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Infrastructure, Human Capital and International Trade

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  • Ronald Findlay

Abstract

This paper presents a general equilibrium model of trade and international capital mobility. Its special features are that productive sectors are differentially influenced by the provision of a public intermediate input or "infrastructure" and that there is an endogenous mechanism for converting unskilled into skilled labor. The "hi-tech" sector uses capital and skilled labor and the "traditional" sector uses capital and unskilled labor, which is also used for the public input and final public services. It is shown that a preference for private over public consumption, due either to consumer tastes or public policy, will lead an economy to have a comparative advantage in the "hi-tech" sector, higher wages, and a more skilled labor force.

Suggested Citation

  • Ronald Findlay, 1995. "Infrastructure, Human Capital and International Trade," Swiss Journal of Economics and Statistics (SJES), Swiss Society of Economics and Statistics (SSES), vol. 131(III), pages 289-301, September.
    • Handle: RePEc:ses:arsjes:1995-iii-2
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    File URL: http://www.sjes.ch/papers/1995-III-2.pdf
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    References listed on IDEAS

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    1. Findlay, Ronald & Kierzkowski, Henryk, 1983. "International Trade and Human Capital: A Simple General Equilibrium Model," Journal of Political Economy, University of Chicago Press, vol. 91(6), pages 957-978, December.
    2. Richard H. Clarida & Ronald Findlay, 1991. "Endogenous Comparative Advantage, Government, and the Pattern of Trade," NBER Working Papers 3813, National Bureau of Economic Research, Inc.
    3. Assaf Razin & Efraim Sadka (ed.), 1987. "Economic Policy in Theory and Practice," Palgrave Macmillan Books, Palgrave Macmillan, number 978-1-349-18584-9, December.
    4. Clarida, Richard H & Findlay, Ronald, 1992. "Government, Trade, and Comparative Advantage," American Economic Review, American Economic Association, vol. 82(2), pages 122-127, May.
    5. Peter B. Kenen, 1965. "Nature, Capital, and Trade," Journal of Political Economy, University of Chicago Press, vol. 73, pages 437-437.
    6. Ronald Findlay & John D. Wilson, 1987. "The Political Economy of Leviathan," Palgrave Macmillan Books, in: Assaf Razin & Efraim Sadka (ed.), Economic Policy in Theory and Practice, chapter 8, pages 289-306, Palgrave Macmillan.
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    Cited by:

    1. Mandal, Biswajit & Marjit, Sugata & Nakanishi, Noritsugu, 2013. "Time Zones, Factor Prices and Inflow of Educational Capital: Changing Sectoral Composition," MPRA Paper 50883, University Library of Munich, Germany.
    2. Biswajit Mandal & Sugata Marjit & Noritsugu Nakanishi, 2018. "Outsourcing, factor prices and skill formation in countries with non-overlapping time zones," Eurasian Economic Review, Springer;Eurasia Business and Economics Society, vol. 8(2), pages 289-304, August.

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